Schizophrenia (Sz) is associated with deficits in cognitive function that represent a core feature of the disorder. Traditional dopaminergic models stress dysfunction within higher order associational brain regions. In contrast, more recent glutamatergic models predict widespread dysfunction across cortical regions, including primary and secondary sensory cortices. Over the past project period, we have documented deficits in early auditory and visual processing in Sz using behavioral-, event-related potential (ERP) and MRI-based approaches, supporting distributed models of cortical dysfunction in Sz. In addition, we have demonstrated significant contributions of early sensory processing deficits to higher order cortical impairments. These studies have permitted us to formulate specific hypotheses concerning neural mechanisms underlying sensory/cognitive dysfunction in Sz, as well as novel approaches to potential treatment development. In the auditory system, early deficits include impaired ability to match tones following brief delay, as well as impaired generation of mismatch negativity (MMN), auditory N1 and auditory steady-state (ASSR) responses. Furthermore, deficits in low level auditory processing contribute to higher order dysfunction, such as impaired ability to interpret prosody, leading to deficits in auditory emotion recognition (AER), which, in turn, contributes to impaired social function. In the visual system, deficits include reduced contrast sensitivity particularly to low contrast, low spatial frequency (LSF) stimuli that preferentially engage the magnocellular visual system, as well as impaired generation of steady state visual evoked potentials (ssVEP), visual P1, and impaired fMRI activation of magnocellular-recipient regions of primary visual cortex. Low level deficits contribute to higher order impairments including in perceptual closure and face emotion recognition (FER). Both auditory and visual deficits contribute to progressive impairment in reading ability, which may be an early marker of Sz. Finally, both auditory and visual deficits correlate with impaired structura and functional connectivity within low level sensory regions, as assessed using diffusion tensor (DTI) and resting state (rsfMRI) imaging. To date, neurophysiological abnormalities have been assessed mainly using time-domain approaches. Over the upcoming period, we will incorporate advanced frequency-domain and oscillatory hierarchical approaches as well, which provide separate indices of spontaneous and event-related dynamics of neuronal oscillations. Visual ERP will be combined with eye tracking to permit evaluation of naturalistic scene processing. We will also explore patterns of dysfunction within both prodromal and first episode (FE) cohorts using paradigms validated during our prior grant cycle. Finally, we will incorporate novel brain stimulation approaches including Transcranial Magnetic Stimulation (rTMS) applied over sensory vs. frontal cortical regions to disrupt local processing in healthy controls as a model for Sz; and transcranial Direct Current Stimulation (tDCS) applied over sensory or frontal brain regions as a prelude to plasticity-based stimulatory intervention in Sz.